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Natural gas rates rise or fall? Answer may surprise you

According to New Jersey Natural Gas’ proposal, a typical residential heating customer who uses 100 therms a month will see their bill go from $109.80 to $105.08, a savings of $4.72. On an annual basis, customers using 1,000 therms a year would see their bills go from $1,114.50 to $1,067.30, a savings of $47.20.

Natural gas rates rise or fall? Answer may surprise you

If there is any benefit to this past winter’s bitter cold and snowstorms, it’s that your natural gas heating bill will likely go down this fall.

New Jersey Natural Gas told state regulators on Monday that it wants to lower natural gas bills by 4.3 percent in time for this coming winter. If approved by the state Board of Public Utilities, it will take effect on Oct. 1.

According to the utility’s proposal, a typical residential heating customer who uses 100 therms a month will see their bill go from $109.80 to $105.08, a savings of $4.72. On an annual basis, customers using 1,000 therms a year would see their bills go from $1,114.50 to $1,067.30, a savings of $47.20.

Even customers who don’t have natural gas heat, but use natural gas for other purposes, such as a stove, will see a 2.8 percent decrease, the utility said.

It will come from a portion of the utility’s bill that covers delivery charges.

Manchester resident Al DuPlessis is happy to see the decrease. “Anything, as long as it’s not going up,” DuPlessis said. “Everything is going up.”

But for now, and with the prospect of a lower bill next winter, he and others are still dealing with last winter’s heating bill.

He’s paying off last winter’s bill after he got hit with high costs from a third-party natural gas supplier, Palmco Energy. He switched from New Jersey Natural Gas to Palmco after the marketer promised a 10 percent savings off of the utility’s wholesale natural gas price. The utility continued to pipe the gas to his home.

But Palmco’s rate doubled when the weather got cold, DuPlessis said. A couple of his bills topped $600, much of it owed to Palmco, not New Jersey Natural Gas.

“The price was sky high,’’ DuPlessis said. He still owes more than $1,000 and is paying it off over time.

He was switched back to New Jersey Natural Gas for his natural gas supply on May 1.

So what’s behind the proposed New Jersey Natural Gas bill decrease?

• Thank the colder-than-normal weather. Weather for October 2013 through April 2014 was 11.3 percent colder. During that period, January through March, which is the height of the winter heating season, was 17.5 percent chillier.

And so, New Jersey Natural Gas customers used more natural gas to stay warm.

• Thank New Jersey Natural Gas’ rate structure. If customers use more natural gas than expected, they’ll get a credit the following winter, according to the utility’s rate regulations. If they use less, they will have to pay more.

“This past winter’s extreme weather provided its fair share of challenges – from the prolonged cold, to the 20 storms that blanketed our state with snow, to record peak demand days – but it also provided us with the opportunity to file a 4.3 percent savings for customers,” said Laurence M. Downes, chairman and chief executive officer of New Jersey Natural Gas, in a statement.

The utility said its wholesale price for natural gas for this coming winter will remain at its current level, which was reduced in December and resulted n a 6 percent bill decrease.

“It shows that this company did well in terms of hedging” its wholesale purchases, said Stefanie A. Brand, director of the state Division of Rate Counsel. “Ratepayers aren’t getting any bad repercussions from the polar vortex and the problems with increasing gas prices as a result of that. Overall, I think it’s a positive for consumers.”

The utility serves 503,679 customers in Monmouth and Ocean and parts of Morris and Middlesex counties.